Conventional investment property loans, statewide in Texas.
Standard, competitively priced financing for non-owner-occupied investment property when your file fits the box. Often the lowest-cost option for a long-term hold, in exchange for full documentation. Texas trades income tax for property tax, and none of the homestead relief reaches a rental. We'll compare it against DSCR so you take the structure that fits; business-purpose only, subject to underwriting.
Typical figures, subject to underwriting and market conditions. Not a commitment to lend.
How it works
For investors who qualify conventionally, this is usually the lowest-cost long-term money on a buy-and-hold. We help you weigh it against our DSCR and bank-statement programs so the loan matches your file and your goals.
What does Texas property tax actually cost me on a rental?
Budget roughly 1.2% to 1.4% of value a year, and treat it as fixed. The Tax Foundation puts the Texas effective property tax rate at 1.40% of owner-occupied housing value for 2026, and published figures range down toward 1.2% depending on the vintage and the county. The rate is set locally by the taxing entities at that address, not by the state, so the only number worth underwriting is the one for the specific property. Two things make this a lending issue rather than a bookkeeping one: property tax is non-discretionary, and it does not fall when the unit sits vacant. On a conventional file that escrow feeds straight into your qualifying ratios, so a bad estimate at application is what kills the loan two weeks in.
Does the 2025 property tax relief apply to my investment property?
No. That relief flows to owner-occupants. The 89th Legislature's SB 4 raised the mandatory school district homestead exemption from $100,000 to $140,000, voters approved it as Proposition 13 in November 2025, and it applies to the 2026 tax year. SB 23 raised the additional exemption for owners 65 and over or disabled from $10,000 to $60,000. Both are homestead exemptions, and a homestead is a property the owner occupies, so a rental, a flip, or a spec house gets none of it. HB 9 exempts up to $125,000 of business personal property from taxation by all taxing entities, but that covers equipment and inventory, not the real property. Underwrite your escrow off the unexempted assessed value, and talk to your CPA about your own filing.
There's no homestead appraisal cap on a rental. What does that mean for my hold?
Your assessed value can track the market every year with no ceiling. The 10% annual cap on appraised value increases applies to homesteads only, so non-owner-occupied property has no such cap and the taxable value can rise with the market year over year. That makes the annual appraisal district protest a real carry variable on a Texas hold, not a formality, and it is one reason a five-year pro forma built on year-one taxes overstates the return. It also means the tax bill you see in diligence on a house the seller lived in can reflect years of capped value that resets once you own it. Model the escrow rising; don't model it flat.
No state income tax on the rent. How much is that worth?
Real, but narrower than it sounds. Texas has no individual income tax, so your net operating income on a Texas rental isn't reduced by a state income tax, which matters most to an out-of-state owner comparing markets. It does not touch your federal tax. And the state gets its revenue elsewhere: property tax is the trade (see the rate above), and Texas imposes a franchise tax on entities rather than a traditional corporate income tax, so if you title in an LLC, as most buy-and-hold investors do, the entity has a Texas franchise obligation to check on. We're a lender, not your CPA. Have yours model the after-tax number before you decide between structures.
How much should I budget for insurance escrow in Texas?
More than last year, and the direction is the honest answer. Texas average homeowners premiums rose more than 55% between 2019 and 2024, and average rate changes filed with the Texas Department of Insurance ran 11% in 2022, 21% in 2023, 19% in 2024, and 4.3% in 2025. The increases have slowed, but they compounded off a base that was already high, and hail exposure is the reason. We don't publish a dollar figure because the statewide averages you'll find disagree with each other by a wide margin and none of them is your property. Get a real bound quote during diligence, since insurance escrow is part of the payment your conventional file has to qualify on.
What's different about closing a Texas investment loan?
Title premium is fixed by the state, and comps are harder than you expect. The Texas Insurance Commissioner is required by statute to fix and promulgate title insurance premium rates, so the premium on a given policy amount is identical at every title company in Texas. There is no shopping it. Effective March 1, 2026, TDI ordered a 6.2% reduction in basic premium rates; the department's own worked example puts a $268,500 policy at $1,612. Competition is on escrow service and endorsements, not the premium. The harder part is value: Texas is a non-disclosure state, sale prices aren't recorded on deeds or compelled to the appraisal district, so off-market and non-MLS comps are genuinely thin and the appraisal carries more of the load on your LTV. If the appraisal comes in short, we'll show you the DSCR option next to the conventional one rather than let the file stall.
What does the down payment look like on a Texas conventional investment purchase?
20% at maximum leverage. We go up to 80% LTV on non-owner-occupied property, so on a $400,000 Texas purchase that is $320,000 from us and $80,000 from you (400,000 x 80% = 320,000), before closing costs and reserves. Budget the Texas property tax line at the go-forward assessed value, not the seller's homestead-capped bill, because a rental gets neither the homestead exemption nor the 10% appraisal cap. Subject to underwriting.
My score is in the low 600s. Can I still buy a Texas rental on this program?
Probably. Conventional investment starts at 580. That is the lowest credit entry point of any documented program we write. Income is fully documented here, so tax returns and pay stubs are part of the file, and there is no hard pull to start. If the paperwork is the obstacle rather than the score, a DSCR loan qualifies off the Texas property's rent instead. Subject to underwriting.
More Conventional Investment questions, answered on the program page
Local rules move. Every tax rate, fee, ordinance and market figure here comes from a primary source and carries the date we read it, and we correct them as the rules change. Where a number is mid-change or we could not verify it, we say so rather than guess. Before you commit a budget, confirm anything that drives it with the city or county, and talk to your attorney or CPA on questions of law or tax.
Published by USA Mortgage Funding, LLC, NMLS #152588. Researched from primary sources by our team, drafted with AI assistance, and every figure checked against its source before publishing. Where an answer rests on a public record, that record is linked under it. Figures read on 2026-08-12.
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